What do we think? The House of Commons Finance Bill Committee are asking for written evidence on this year’s Finance Bill. Is there any point in my writing up my blog posts on measures with nil and negligible impact and asking them to consider a cull? Or would that be teaching my metaphorical grandmother to suck metaphorical eggs as surely it’s the essence of parliamentary scrutiny?

There are 100 open consultations listed on the gov.uk website this morning, and 13 of them are from HMRC… do we not think HMRC are legislating too much???

Having a quick flick through to see if there are any which expire soon I came upon this: the draft legislation for the soft drinks industry levy (the tax on sugary drinks). It is, in my humble opinion, wretched stuff, trying to define in legislation when is a fruit drink different from a vegetable juice different from a milk drink and what constitutes a milk substitute drink. Treble almond milks and years of anti avoidance legislation after amusing tribunal cases sampling kale, mango and almond smoothies all round?

However my eye was, of course, instantly drawn to the TIIN, or at least to where the TIIN ought to be. Because, look, here is what it says at the end of the draft SI for the levy itself:

A Tax Information and Impact Note has not been prepared for this Instrument as it contains no substantive changes to tax policy.

No. Just, no. The TIIN is there to inform parliament about the legislation they are being asked to rubber stamp. There is little enough genuine scrutiny of this kind of legislative gunk as it is, and at least attaching a TIIN gives readers the chance to see what the likely impact is of letting this go through on the nod.

I was getting ready to write a righteous screed in the manner of Angry of Tunbridge Wells about how it really is appalling that no TIIN has been prepared for this entirely new tax…

…and then I used google. And of course there WAS a TIIN, and it’s here, from when the primary legislation was published last year.

In order to inform Parliament, surely the last sentence of the draft instruments should read something like “The TIIN for this measure was published in 2016 and may be found at https://www.gov.uk/government/publications/soft-drinks-industry-levy/soft-drinks-industry-levy”

And then I thought, oh, they’re asking for feedback on the draft legislation, and that IS feedback… So there you go.

Let’s take a break from the Budget TIINs for a moment and look at the open consultations here.

There are fourteen open consultations, most of them from last week.

How, exactly, does anyone envisage this is going to work, please? Are representative bodies really going to be able to consult with their members before Christmas? Or in January (tax return season, remember?)

Question for the group: is the quality of HMRC legislation improving, or deteriorating, do we think? And does adequate consultation tend to make the resulting legislation better, or worse?

Income Tax: armed forces accommodation allowance exemption (page 72) Apparently members of the armed forces are provided with living accommodation free from the usual benefit-in-kind tax charge. Apparently the government intends to provide them with an accommodation allowance (if they’re stationed in the UK) instead, so they’re going to be excluded from the tax and NIC consequences of that, too.

Whilst I’m all in favour of the Armed Forces Covenant (people who are willing to get shot in our defence deserve decent treatment after all) I’m not convinced the best way of dealing with this is through the tax system. Maybe try providing better accommodation and/or better pay? Just a thought.

Income Tax: extending Seafarers’ Earnings Deduction to the Royal Fleet Auxiliary (page 75) This will affect about 900 employees of the Royal Fleet Auxiliary who have been getting Seafarers’ Earnings Deduction on a concessionary basis by disapplying the definition of “Crown employment” that excludes them from it. Sticking plaster for previously defective legislation, in other words. Sigh.

Corporation Tax: exemption for Northern Ireland Education Authority (page 116) Education authorities are exempt from corporation tax. In 2014 Northern Ireland re-organised its education authorities into one, but along the way no-one seems to have realised that, while the existing bodies were exempt from corporation tax, the new one wouldn’t be unless someone did something about it. In other words, another sticking plaster for some badly-thought-through legislation.

By the way, whoever wrote the equalities impact – about five minutes before it went to print, judging from the way it’s in a different font from the rest – is taking the mickey, surely?

As the measure does not impact on people, there are no equalities impacts

Stamp Duty Land Tax higher rates: minor amendments (page 159) When you look at a measure which affects “Schedule 4ZA Finance Act 2003” you have to ask whether the added complexity (seriously, the schedules get to a Z?) is justified by the gravity of the problem to be solved. In this case, it’s people getting divorced suffering higher rates of SDLT when they reorganise their property. I’m not convinced, but then I’m also not divorced.

Income Tax: scope of Qualifying Care Relief for self-funded Shared Lives payments (page 166) Qualifying Care Relief is a simplification scheme that lets people paying for their own care (for example when a local council gives you funds to pay a carer instead of providing a carer themselves) use a standard deduction rather than keep detailed records of expenses. At present it applies to a scheme called Shared Lives but only if the council pays for it and not if it’s self-funded. This piece of legislation gives the self-funded people the same option.

I have two objections here. First, does this not seem to be another sticking plaster on badly devised legislation? But more importantly, the TIIN says “up to 170” carers will benefit. I know that since the Wilkinson case there has been a huge reluctance to create Extra Statutory Concessions (ESCs) because the Court of Appeal didn’t think HMRC had the power to do so. Wouldn’t it be a great idea if, instead of faffing about with legislation like that, Parliament just gave HMRC the power to make ESCs again?

Extend First Year Tax Credits for 5 years and reduce the rate of claim (page 174) It’s a thing where loss making businesses can get a tax credit instead of capital allowances. (they would have got 100% capital allowances on water and energy saving plant and machinery except they haven’t got profits to set them against, so they get the tax credit – cash – instead). It was brought in with a five year sunset clause so it expires this year. It’s being extended.

Well fine: but where’s the analysis of whether it’s achieved its original policy objective and what the costs and benefits have been, huh? Isn’t that, you know, the idea of having a sunset clause in the first place???

What does “negligible” mean? Well, if you will turn to page 37 of OOTLAR (the overview of tax legislation and rates) published with the Budget last week, you will see (para 3) that

Where the exchequer impact is negligible, the impact is less than £5 million in any one year.

In a country with thirty million individual taxpayers, a million corporation taxpayers and two million VAT payers (figures rounded from the spreadsheet here) you have to work quite hard to get a “negligible” impact.

Income Tax: Marriage Allowance claims on behalf of deceased partners (page 44) is clearly negligible – the pettifogging rules around the transfer of allowances between married couples are already bad enough. It’s a purely cosmetic political measure designed to “reward marriage in the tax system” without unwinding independent taxation of men and women and the sooner it’s abolished entirely in the name of simplification the better in my view. However, if we have to have it, then yes, we shouldn’t faff about with it when one of the partners dies, I suppose. But why did no-one think of that when they introduced it in the first place?

Income Tax: mileage rates for unincorporated property businesses (page 46) however is a classic example of how not to simplify the tax system. Repeat after me, options are not simplification. Adding a different way of claiming travel expenses in a property business doesn’t make the taxation of property businesses simpler, it makes it lighter. It means that any properly advised property business is likely to want to work out its travel expenses twice to see which method is most advantageous. Also, this seems to be a “this is the way it’s done for other unincorporated businesses” measure, which means there was, somewhere along the way, a missed opportunity to add “and property businesses” into the legislation, creating the gap this piece of nonsense is filling. In other words, this is tinkering that would, in a properly regulated system, have been entirely unnecessary as a separate measure, because you’d have done the thing right in the first place.

Partnership taxation: proposals to clarify tax treatment (page 52)

While the rules governing the allocation of partnership profits for tax purposes and the return of those profits are clear in the majority of situations, their application in certain modern commercial arrangements is not always without doubt

Yeah. This is why the tax system can’t have nice things.

Income Tax: venture capital trusts: limiting the effect of anti-abuse provisions on commercial mergers (page 56) is a reverse anti-avoidance measure! There’s an anti-avoidance rule that restricts the tax relief you get on a venture capital trust if you sell the shares and then subscribe for new ones in a trust which merges with the old one, in other words stops people setting up a scheme where the investors ping in and out. But, no! Sometimes they do that for commercial reasons! And it’s not fair waaah if the anti-avoidance provisions hit them then!

I have no patience with changes to tax law that are piling on the clauses for nugatory benefit: personally I’d abolish the relief entirely. But this “problem was raised by a representative body after it was contacted by a VCT planning a merger”. They couldn’t plan their way out of it? Compensate their investors some other way? Suck it up and get on with it? Nope: they got the law changed and added another level of complexity for a change where “the number of individuals affected is not known but is likely to be fewer than 1000”.

Income Tax: Venture Capital Schemes: relevant investments (page 69). This is just bad lawmaking, or at least this is putting duct tape on the holes in existing bad legislation. There’s an overall annual limit on the amount of EIS and VCT investment a company can receive; then they twiddled with that to make sure it wasn’t retrospective, then there was another tweak that included a lifetime investment limit, but that didn’t take account the transitional provisions that were already in place so some pre-2012 investments are accidentally left out of the lifetime limit… and this remedies that!

It will, says the TIIN, affect “a maximum of 100 individual investors” and “fewer than five companies have been affected by the provisions since November 2015”

Congratulations, then: this is the most pointless piece of legislation of the clauses covered by this batch of TIINs… so far…

If a change to the tax law adds no tax and relieves no costs (to taxpayer or HMRC) then surely you have to ask: why is it happening at all? Here we are back in OOTLAR with the rest of the “nil” exchequer impact TIINs.

Corporation Tax: amendments to the hybrid and other mismatches regime (page 98) is another “gasman cometh” measure. It is “designed to ensure that the regime operates as intended” and again, I have to ask why the legislation (introduced by Sch 10 FA 2016) is already broken. I mean, fix it, OK, but maybe send the people who wrote it back to some other work. There should be consequences.

Ring Fence Corporation Tax: tariff receipts (page 104) seems to be a result of an oil and gas industry shopping list. Although North Sea oil and gas is subject to Ring Fence Corporation Tax at 30% and a Supplementary Charge at 10% there are substantial “incentives” for infrastructure spending and decommissioning. There are, apparently, “activities…which give rise to tariff income” and this no cost/no saving measure will “make it clear” that all tariff receipts qualify for infrastructure incentives.

Again I have to ask, why does this need to be legislated? Why can’t HMRC just “make it clear” by saying, clearly, something like “all tariff receipts qualify for infrastructure incentives?” I’m just saying.

Income Tax: debt traded on a multilateral trading facility (page 107) I have to say I’m suspicious of this one. It excludes a couple of different kinds of corporate debt (the kind of debt traded on a stock exchange) from the requirement to withhold tax on the interest arising. This, apparently, is to “improve the competitiveness” of the UK debt market.

Well OK… but why doesn’t it have any exchequer impact? (I note the exchequer impact, the HMRC impact and, curiously, the equalities impact are in a different font from the remainder of the TIIN, which again to me is strongly suggestive of a last minute panic to write the assessment.) Maybe we’re excusing interest from tax that wouldn’t have arisen in the UK at all if it hadn’t been excused from tax, so there’s – logically – no exchequer impact. But if that’s the case, wouldn’t there then be an economic impact?

This measure is not expected to have any significant macroeconomic impacts. However there will be a behavioural impact as debt is moved from overseas MTFs to UK MTFs.

I’d like to see some estimate of the size of this economic impact, because if we’re going to make ourselves a tax haven we ought at least to get the peripheral economic benefits, no?

Corporation Tax: capital gains assets transferred to non-resident company: reorganisations of share capital (page 127) This “follows representations from affected business sectors” and, essentially, seems to stop multinationals from incurring tax when they reorganise an overseas branch structure due to an “anomaly” in the way the legislation is written.

I can’t tell whether or not this is a good idea, because it’s said to have “nil” exchequer impact. But the idea of an impact assessment is, surely, to look at the potential consequences of an idea during the development of the measure, and if you were going to develop a piece of legislation to stop companies being “accidentally” taxed, wouldn’t you first establish how big the problem was? In other words, are we relieving a few grand or a few billion? If the exchequer impact really is zero, then again, why do we need the legislation at all?

Vehicle Excise Duty: rates for cars, vans, motorcycles and motorcycle trade licences from April 2018 (page 142) This is… this is… well, frankly, this is bullshit. This is an impact assessment for the routine uprating of Vehicle Excise Duty by RPI where the objective is to ensure that motorists “continue to make a fair contribution to the public finances”. And yet its exchequer impact is said to be “nil”! Are you kidding me? Did the writers of this think that no-one would be bothered to read it? I actually went to the “further advice” section at the end of the TIIN where usually there are details of a policy official one can contact in the case of a technical enquiry.

Here? It’s the general DVLA helpline. The contempt for the process is staggering. Why bother to complete the TIIN at all? Why not simply write “FOAD” instead – it’d be simpler and clearer all round.

Double taxation: Powers to implement Multilateral Instrument (sic)(page 164) Ah, the Department of Random caPitalisation at work again. Please, writers of the Treasury style guide, pick a rule and stick with it! Otherwise, as for the last one, bog-standard anti-avoidance.

Annual tax on enveloped dwellings: annual chargeable amounts (page 184) This is another of the “why does this have to be legislation” measures. The annual charge (you don’t even need to know what the charge is for) increases each year since 2013 by inflation (measured by CPI) rounded down to the nearest £50.

Now: if you know what the first year’s charge was, and you have your table telling you what CPI is each year, then you can work this out. It’s not rocket science, it’s scarcely A-level maths. So why does it have to be enshrined in legislation?

Because, according to the TIIN, Section 101(5) of the 2013 Finance Act requires a Treasury Order to be published before each 1st April setting out what the amount is. So because a Treasury Order is a regulation that brings the measure within the bounds of the TIIN system they need to publish a TIIN, but because there’s no change to the amount (which, one assumes, was scored in the original 2013 legislation) it’s a pointless Nil-nil-nil TIIN. So the TIIN is a waste of time. But surely the Treasury Order itself is a waste of time. It’s a clear, plain formula: uprate the previous year’s rounded figures by CPI and round down to the nearest £50. Say it once, do it every year, legislate only if someone starts finding a clever way round it. Stop fussing, stick the figures on a website and just repeal Section 101(5) of the 2013 Finance Act instead.

Here endeth my gallop through the TIINs with the exchequer effect at zero: next – those with “negligible” impact!

Ten months ago I wrote about using the tools that the government already has – the impact assessment process that results in the TIINs published with tax legislation – in order to achieve a simpler tax system. In particular, why don’t Members of Parliament use the information in TIINs to challenge the inclusion of changes which have no exchequer effect, relive no administrative burden and remove no government costs. At the very least, I argue, such measures ought to be carefully scrutinised to see if the policy objective is a sensible one and is likely to be achieved by the changes suggested.

Here, then, we have the 2017 Budget OOTLAR and some TIINs for tax changes which will bring in no extra money.

Income Tax: encouraging more high-growth investment through Venture Capital Trusts (Page 62 of OOTLAR) This simply updates the regulations controlling how Venture Capital Trusts must invest to retain their tax advantages. Does this need to be legislation? There couldn’t be, I don’t know, a handbook or something?

Taxable benefits and vehicle excise duty: regime for measuring carbon dioxide emissions (Page 87) I’m sorry but this one makes my blood boil. There are rules about carbon dioxide emissions for company cars that govern its treatment for vehicle excise duty and company car tax. At present you test emissions using something called NEDC. From September this year there’s a new test, something called WLTP. Currently the legislation doesn’t specify which test you use. If this is passed, it will.

I mean, really?

Seriously?

Apparently car makers want “certainty”. Well, why not make cars that produce emissions which are clearly under the threshold whichever way you run the test? This is a ridiculous and unnecessary measure and at the same time a classic example of how the tax system becomes overcomplicated – and why tax simplification is a good thing.

The point isn’t to legislate for the benefit of car manufacturers. The point is to legislate for the citizens of the country, those who will be advantaged by lower carbon emissions from their cars. Sod the certainty – make your cars pass the test whether you test it with one set of initials or another.

Pensions tax registration (page 90) This looks to me like a piece of “gasman cometh” legislation – you know the Flanders and Swann song? Where the gasman comes on a Monday morning and disturbs the skirting boards, the carpenter hammers through a cable…

Here the Pensions Regulator has a “new authorisation and supervision regime for Master Trust pension schemes” and this bit of nil exchequer effect regulation is required to let HMRC have power to refuse registration of pension schemes that don’t meet the new requirements.

This one bears all the signs of having been completed in a tearing hurry five minutes before the Budget paperwork was put to bed, including font changes in the document, and I wonder if the whole measure was put together in five minutes when someone spotted the hole in the web of powers between the two departments.

Of course a better solution might have been to coordinate properly and make the tax relief dependent on the approval of the pensions regulator, and the pensions regulator’s word be final?

Corporation Tax: amendments to the corporate interest restriction rules. (Page 93) Oh this one is good: “this measure makes technical amendments to the Corporate Interest Restriction (CIR) rules to ensure the regime works as intended.” In other words, someone found a hole in the rules and we need to tinker with the system to plug it? OK, but personally I’d stipulate that in return the person from the Treasury who signed off on it in the first place and their equivalent in HMRC have to go and do routine compliance work till they bring in, what, five million or so?